According to the recent “The Long Tail” perspective (Anderson, 2004) the significant changes brought about by the digital age and by the web 2.0 are having a deep impact on market structures since they are leading to hyper differentiation: much information is now available, the marketplace is more transparent and consumers can now optimize their choices (Clemons, 2008). As a consequence the importance of business models based in niche markets is steadily increasing. In the past most of companies were more likely to focus on mass markets and key clients who were thought to be more profitable. Nowadays the falling costs of storage and distribution and the global market makes it profitable to target the so-called “The Long Tail”, which means serving niche markets and niche clients. That is why niches often translate to riches (Brynjolfsson, 2006). So far the costs to retain small niche clients have generally been estimated to be higher than the corresponding costs to retain key clients. Anyway given the new technologies, on which the long tail perspective is based, retention costs can be strongly decreased. This research is a preliminary study about the consequences of the changes mentioned before for brand loyalty and brand strategy. In particular, this paper intends to gather some evidences on how brand loyalty is positively or negatively affected by the choice of focusing on the long tail instead of the mass market, i.e. whether long tail customers are more or less loyal to the brand as compared to mass market customers. Specifically this study focuses on brand loyalty expressed by small and localized, “The Long Tail” virtual communities, following recent researches about general brand loyalty within virtual communities (Lin, 2008; Lin et al. 2008; Porter and Donthu, 2008) The preliminary results confirm that “The Long Tail” niche clients are characterized by different brand attitudes and by a different level of brand loyalty as compared to mass market clients
The Long Tail Perspective for Niche Communities Online: a Framework for Brand Loyalty Measurement
CASSIA, FABIO
2009-01-01
Abstract
According to the recent “The Long Tail” perspective (Anderson, 2004) the significant changes brought about by the digital age and by the web 2.0 are having a deep impact on market structures since they are leading to hyper differentiation: much information is now available, the marketplace is more transparent and consumers can now optimize their choices (Clemons, 2008). As a consequence the importance of business models based in niche markets is steadily increasing. In the past most of companies were more likely to focus on mass markets and key clients who were thought to be more profitable. Nowadays the falling costs of storage and distribution and the global market makes it profitable to target the so-called “The Long Tail”, which means serving niche markets and niche clients. That is why niches often translate to riches (Brynjolfsson, 2006). So far the costs to retain small niche clients have generally been estimated to be higher than the corresponding costs to retain key clients. Anyway given the new technologies, on which the long tail perspective is based, retention costs can be strongly decreased. This research is a preliminary study about the consequences of the changes mentioned before for brand loyalty and brand strategy. In particular, this paper intends to gather some evidences on how brand loyalty is positively or negatively affected by the choice of focusing on the long tail instead of the mass market, i.e. whether long tail customers are more or less loyal to the brand as compared to mass market customers. Specifically this study focuses on brand loyalty expressed by small and localized, “The Long Tail” virtual communities, following recent researches about general brand loyalty within virtual communities (Lin, 2008; Lin et al. 2008; Porter and Donthu, 2008) The preliminary results confirm that “The Long Tail” niche clients are characterized by different brand attitudes and by a different level of brand loyalty as compared to mass market clients
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